The Israeli parliament has passed a law that allows the minister of interior to revoke the residency rights of any Palestinian in Jerusalem on grounds of a "breach of loyalty" to Israel.

The bill, ratified on Wednesday, will also apply in cases where residency status was obtained on the basis of false information, and in cases where "an individual committed a criminal act" in the view of the interior ministry.

Under the new measure, Israel's Interior Minister Aryeh Deri, leader of the ultra-Orthodox political party Shas, will be able to strip the residency documents of any Palestinian whom he deems a threat.

Hanan Ashrawi, a senior member of the Palestine Liberation Organisation (PLO), described the law as "an extremely racist piece of legislation.